Friday 27 January 2023

US adamant at containing Iran oil sales

The United States is not happy with the upward trend in Iran's oil exports in recent months and intends to take steps to dissuade and put pressure on countries buying oil from Islamic republic, the US state department's special Iran envoy Rob Malley said.

Speaking to Bloomberg TV, Malley said the US extra-territorial sanctions that have been in place on Iran and its oil sales since former US President Donald Trump pulled Washington out of the Iran nuclear deal in 2018 are still very much in place and have not been "loosened or lessened".

He acknowledged the rise in Iran's oil sales since late last year, saying that Washington is monitoring the situation closely, and taking steps to clamp down on the rising flows — particularly when it comes to China. The country has been the biggest destination for Iranian crude by some distance since the sanctions came into force.

"We keep trying…to take the steps we need to stop the export of Iranian oil and deter countries from buying it," Malley said. But when "you focus on China, that's right. It has been the main destination of elicit exports by Iran."

Oil analytics firm Vortexa pegs Iran's overall crude and condensate exports at 1.28 million b/d for the fourth quarter of 2022, up by 56% compared with 818,200 b/d in the third quarter, and up by 51% on 844,700 b/d in the fourth quarter of 2021.

Argus' tracking puts Iran's crude and condensate exports at 1.11 million b/d on average in the fourth quarter, up by 43% from 776,000 b/d in the third quarter, and by 58% from 704,500 b/d in the corresponding quarter in 2021.

The increase in Iranian shipments coincided with a rally in Chinese demand for oil with refinery runs hitting an 18-month high in November 2022, and remaining high in December 2022. Chinese imports from Iran via Malaysia rose to a record high 1.2 million b/d in November, as independent refiners in Shandong province raced to use up their 2022 import quotas, according to Argus data.

Malley said the US has been in contact with the Chinese authorities on the issue and will continue to take steps to sanction all individuals and entities that are found to be involved in the import of Iranian oil. "The conversations we've had with the Chinese, which go back several months, will be intensified," he said.

The US Treasury Department most recently targeted 13 companies in November registered in China, Hong Kong, the Marshall Islands and the UAE over alleged facilitation of oil trader and contravention of US sanctions.

Malley admitted that the US' sanctions on Iran has been far from "perfect" so far but said the US will "do as much as we can" and "everything in our power to make sure that our sanctions are enforced.

 

Thursday 26 January 2023

Pakistan: Revised conditions approved for sugar export

The meeting of the Economic Coordination Committee (ECC) of the Cabinet has revised conditions regarding mode of payment and time period for realization of export proceeds of sugar and decided that cane commissioner Punjab would allocate quota of sugar to the exporters.

The meeting of the ECC presided over by Finance Minister Ishaq Dar on Thursday allowed Provincial Cane Commissioners Punjab as in the case of Sindh to allocate quota within seven days after the issuance of notification and export of sugar within 45 days of allocation of the quota.

The ECC also decided that export proceeds would be received either in advance through banking channel, or within a period of 60 days of opening of Letter of Credit (L/C) for export of sugar on a summary moved by the Ministry of Commerce.

The meeting was informed that the ECC has already allowed export of a total of 250,000 metric tons of sugar on January 03, 2023. However, certain queries have been raised by the stakeholders in the process of export of sugar.

The meeting was further informed that the SBP has highlighted that the ECC’s decision does not specify any timeline for shipment of the export consignment after approval of quota. It poses the risk that exporters may avail quota but not execute the transaction, or may stretch it beyond the timeframe of two months.

The SBP has, therefore, recommended that shipment of consignment be ensured within 30 days of quota allocation. In addition, Pakistan Sugar Mills Association - Pujnab Zone (PSMA-PZ) has also requested that quota for export of sugar may be allocated through Cane Commissioner Punjab as done in the case of Sindh.

The ECC meeting after detailed discussion approved the revised conditions that include: 1) export proceeds shall be received either in advance through banking channel, or within a period of 60 days of opening of LC for export of sugar; 2) the exporter shall ensure that the consignment is shipped within 30 days of quota allocation; and 3) quota for export of sugar may be allocated from already decided provincial quota, through Provincial Cane Commissioner, Punjab, as already approved by the ECC in case of Sindh.

The meeting was attended by Federal Minister for Commerce Syed Naveed Qamar, Federal Minister for Power Khurram Dastgir Khan, Federal Minister for Industries and Production Syed Murtaza Mahmud, Minister of State for Finance and Revenue Dr Aisha Ghous Pasha, Shahid Khaqan Abbasi former prime minister and member of National Assembly, Special Assistant to Prime Minister (SAPM) on Finance Tariq Bajwa, SAPM on government effectiveness Dr Muhammad Jehanzeb Khan, Coordinator to Prime Minister on Commerce and Industry Rana Ihsan Afzal, Governor SBP, federal secretaries, and other senior officers.

 

Northrop Grumman expects strong 2023 revenue on weapon demand surge

US defense contractor Northrop Grumman Corp on Thursday forecast full-year sales above Wall Street estimates, as it benefits from strong demand for weapons from countries ramping up their defense spend.

The United States and its allies have been buying more arms and ammunitions and supporting Ukraine with billions of dollar in military aid after Russia invaded the country last year.

During the quarter, Northrop rolled out its new B-21 Raider jet, the first of a new fleet of long-range stealth nuclear bombers for the United States Air Force.

"We're raising our sales outlook for 2023 and expect to deliver strong multi-year cash flow growth," Northrop Grumman Chief Executive Kathy Warden said.

The Falls Church, Virginia-based company expects 2023 sales between US$38 billion and US$38.4 billion, ahead of the average analyst estimate of US$37.86 billion, and an adjusted profit of US$21.85 to US$22.45 per share, as compared to the estimates of US$22.30, according to Refinitiv IBES data.

Meanwhile, rivals General Dynamics Corp and Lockheed Martin Corp forecast their annual profit below estimates, as the industry grapples with labor and supply shortages.

Northrop, which produces the fuselage for the F/A-18 Super Hornet fighter jet, posted sales of about US$10.03 billion for the quarter ended December 31, 2022, ahead of analysts' average estimate of US$9.66 billion.

Sales in its space systems unit, which makes satellites and payloads, jumped 23% to US$3.28 billion, helped by higher investments towards space exploration projects.

Sale in its defense unit, which makes integrated battle management systems, weapons systems, rose to US$1.66 billion, from US$1.38 billion.

Overall adjusted net income stood at US$7.50 per share, ahead of analysts' average estimate of US$6.57 per share.

 

 

 

 


Wednesday 25 January 2023

US Dollar near eight month low

The dollar lolled near an eight-month low against its peers on Thursday, as a gloomy US corporate earnings season stoked recession fears and as traders stayed on guard ahead of a slew of central bank meetings next week.

The US dollar index, which measures the greenback against a basket of currencies, last stood at 101.53, languishing near last week's eight-month trough of 101.51.

Trading was thin on Thursday, with Australia out for a holiday and some parts of Asia still away for the Lunar New Year.

Downbeat earnings and guidance from US corporates and a string of tech sector layoffs have deepened fears of an economic downturn in the United States, leading investors to pare back expectations on how much longer the Federal Reserve will need to aggressively raise interest rates.

"There are now signs the US economy may be slowing in a more meaningful manner," said economists at Wells Fargo.

"With the Fed no longer leading the charge on interest rate hikes and US economic trends set to worsen, we now believe the US dollar has entered a period of cyclical depreciation against most foreign currencies."

The Fed's policy-setting committee will begin a two-day meeting next week, and markets have priced in a 25-basis-point interest rate hike, a step down from the central bank's 50 bp and 75 bp increases seen last year.

Markets expect policymakers at the Bank of England and European Central Bank (ECB), who will also meet next week, to deliver 50 bp rate hikes. The ECB is seen most likely to remain hawkish.

Sterling was last 0.12% higher at US$1.2415, while the euro rose 0.05% to US$1.0920, flirting with its nine-month high of US$1.0927 hit on Monday.

"The euro does draw a lot of attention," said Jarrod Kerr, chief economist at Kiwibank. The euro zone "had a favourable winter .... The energy crisis that people were expecting hasn't quite played out yet."

Elsewhere, the Canadian dollar last traded at 1.3393 per dollar, after the Bank of Canada on Wednesday raised its key interest rate to 4.5% but became the first major central bank fighting global inflation to say it would likely hold off on further increases for now.

The Aussie edged 0.06% higher to US$0.7107, after jumping 0.8% on Wednesday following shock data showing Australian inflation had surged to a 33-year high last quarter, bolstering the case for the Reserve Bank of Australia to raise interest rates again next month.

The kiwi steadied at US$0.6480, having slumped 0.43% in the previous session after New Zealand's fourth-quarter annual inflation came in below its central bank's forecast.

In Asia, the Japanese yen rose 0.3% to 129.21 per dollar.

Bank of Japan (BOJ) policymakers debated the inflation outlook at their January meeting, with some warning that it could take time for wages to rise sustainably, a summary of opinions at their meeting showed on Thursday.

At that meeting, the BOJ kept ultra-low interest rates unchanged but beefed up a monetary policy tool to prevent the 10-year bond yield from breaching its new 0.5% cap. Its decision defied market expectations of further tweaks to monetary policy.

 

Biden to send 31 Abrams tanks to Ukraine

Finally, US President Joe Biden has agreed to send 31 M1 Abrams tanks to Ukraine, matching a German announcement to immediately provide Leopard tanks that Kyiv says are essential in their fight against Russia.

It must be kept in mind that the Abrams tanks are not expected to reach the battlefield for months related to the time needed to procure the tanks and carry out the training necessary for Ukrainian forces, senior administration officials told reporters Wednesday.

The decision to provide the Abrams tanks marks a stunning reversal for the Biden administration, which had previously argued they would be of little benefit to Ukraine.

But the decision to send the tanks helped get Germany to move forward with a separate effort to provide Leopard tanks to Ukraine, which the US had seen as benefitting Kyiv.

German Chancellor Olaf Scholz announced Wednesday that Berlin would send Leopard tanks to Ukraine and allow for other European nations to also send to Kyiv the German-made tanks.

“Today’s announcement really was the product of good diplomatic conversations as part of our regular and ongoing close consultations with allies and partners on security assistance to Ukraine,” a senior administration official said, “Certainly very appreciative of Chancellor Scholz’s announcement today.”

Ukraine lobbied hard for US, Germany and other countries to supply the tanks, which it said would be critical to a spring counteroffensive against Moscow.

“So the tank coalition is formed. Everyone who doubted this could ever happen sees now, for Ukraine and partners impossible is nothing,” Ukrainian Foreign Minister Dymtro Kuleba tweeted.

A senior administration official, responding to a question over whether the delivery of Abrams was a precondition for the Germans to greenlight Leopards, said Biden and Sholz spoke several times by phone over the past month and that the tank discussion was part of an “iterative conversation” between the US and Germany.

“We have closely coordinated our security assistance with allies and partners throughout the conflict, including Germany,” the official said.

Biden spoke Wednesday morning with Sholz, French President Emanuel Macron and British Prime Minister Rishi Sumak, officials said.

A senior administration official said the US expects other nations to announce contributions of additional armored capability, including some that will be readily available for use on the battlefield in the coming weeks and months. 

The administration expects that Russian President Vladimir Putin will push for the Russian military to go on another offensive as the weather improves, another senior administration official said. The tanks decision is meant to help give the Ukrainians the the ability to retake, to reclaim their sovereign territory and that means everything that is recognized by international borders.

The British Ministry of Defense said in a recent intelligence assessment that Ukraine has liberated around 54% of the maximum amount of extra territory Russia seized since it launched its full-scale invasion on February 24, 2022.

Russia still controls around 18% of internationally recognized areas of Ukraine, including the eastern region of Ukraine, called the Donbas, and the Crimean peninsula, which Moscow seized in 2014. Their annexations have been rejected by the US and other international partners. 

Ukrainian President Volodymyr Zelensky has said the full liberation of Ukrainian territory, and in particular Crimea, is necessary for any peace talks with Russia. 

The Biden administration has been careful in offering military support to Ukraine, wary of Putin threats to use nuclear weapons.

Russian ambassador to Germany, Sergei Nechaev, reportedly said in a statement Wednesday that Germany’s decision to approve the delivery of Leopards is extremely dangerous and takes the conflict to a new level of confrontation. 

Western support of advanced military capabilities is viewed as essential for Ukrainians to mount a counter offensive that could threaten Russia’s holding of the Crimean peninsula.

The senior administration official, responding to a question of whether the administration supports Ukraine retaking territory in the Donbas and Crimea, said that the US does not tell the Ukrainians where to strike, where to attack, where to conduct offensive operations.

“Crimea is Ukraine. We’ve never recognized the illegal annexation of Crimea,” the official continued. “But where the Ukrainians decide to go and how they decide to conduct operations in their country, those are their decisions to make.” 

It is expected to take months before the Abrams reach the battlefield. Training of Ukrainian forces for operating and maintaining the tanks is expected to take place outside of Ukraine, the officials said. 

A senior administration official described the coordination on tanks for Ukraine as an impressive display of unity nearly a year into the conflict, underscoring Biden’s focus on coordination with allies and partners. 

“The President has been extremely focused on the importance of alliance-unity, of Trans-Atlantic unity, and we have tried to make that a hallmark of everything that we have done for Ukraine throughout the 11 months of this conflict.”


Maersk and MSC to end alliance beginning 2025

Denmark's Maersk and Swiss-based MSC, the world's largest container shipping companies, said on Wednesday they had agreed to end a vessel sharing alliance in January 2025, allowing them to pursue individual strategies.

The 2M alliance was introduced in 2015 to cope with a glut of ships and weak demand, and to ensure competitive and cost-efficient operations on main shipping routes from Asia to Europe, as well as across the Atlantic and Pacific oceans.

Both companies saw the alliance as a way to manage more capacity after purchasing new mega-ships.

More recently, MSC responded to rising shipping rates caused by pandemic-related delays and bottlenecks by increasing the size of its fleet, while Maersk has kept its fleet size mostly steady.

"Today, we have a much different strategy, where we more look at how to integrate container shipping at sea with our land-based logistics business," Maersk's head of ocean shipping Johan Sigsgaard told Reuters in an interview.

"Operating our own network gives us more flexibility and allows us to connect our ships exactly where we want," he said.

Maersk expects to be able to deliver ocean shipping at the same scale when the partnership with MSC ends without raising the cost of moving each container at sea, Sigsgaard said.

Shares in the company fell after the announcement and were trading 3.6% lower at 1103 GMT.

MSC said in a statement, "We continue to strengthen and modernize our fleet, providing us with the scale we need for the most comprehensive ocean and short-sea shipping network in the market."

MSC, privately owned by the Aponte family, overtook Maersk as the world's biggest container in 2021. Both companies hold market share of around 17%.

"We have been fighting fiercely over customers and market share the last eight years. I don't see increased competition as a result of this," Sigsgaard said.

 

 

 


Tuesday 24 January 2023

Bangladesh: Opposition seeking US help

I am obliged to refer to a letter by the Coalition for Human Rights & Democracy in Bangladesh (CHRD Bangladesh) to Donald Lu US Assistant Secretary of State for South and Central Asian Affairs. CHRD has appreciated sincere and commendable works during visit of Donald Lu to Bangladesh on January 14-15, 2023.

It has also referred to its earlier letter dated January 08, 2023, emphasizing the importance of Donald’s visit in view of the ongoing volatile political situation generated by the anti-democratic practices by the administration of Prime Minister Sheikh Hasina in the face of the people’s countrywide movements against her rule.

The people are seeking the end of her fascist regime, which they call illegal because it continued to capture power since 2009 through massive election fraud. Bangladeshis want free and fair elections under a neutral authority. We look forward to the materialization of your objectives at the soonest.

The CHRD Bangladesh may take this opportunity to highlight a few core foreign policy objectives of the US administration: Human Rights, Freedom of the Opposition’s Political Activities and Election Integrity.

Human Rights Human rights still remain a far cry in Bangladesh. The regime apparently maintained a slight pause in its repressing activities during your visit, but intensified them on the people and the opposition immediately afterwards, as if in retaliation of the pressure of your visit.

The human rights violations by the notorious Rapid Action Battalion (RAB) and police might have shown slight improvements since the US sanctions in December 2021, but their routine abuses against the people continued unabated, much of which perhaps escaped the attention of the monitoring agencies.

On January 21, 2023, a RAB member in Dhaka was caught trying to rob a car carrying passengers coming from overseas. Few people can talk, much less criticize, the regime under the draconian Digital Security Act (DSA).

They continue to be severely penalized for mild words against the Sheikh family and the ruling elites. 

In Bangladesh today, only the ruling Awami League has the freedom of activities which include extortion, social crimes and attacks on the political opposition. The opposition parties have little or restricted political activities (lately as prescribed by the ruling authority).

The RAB, police and the party thugs continue to flex their muscles against the opposition and prevent or disrupt their peaceful gatherings and activities. Their attacks on the party gatherings of the Bangladesh Nationalist Party (BNP) on December 07 and 08, 2022 sent many to their graves, hospitals and jails. Even during your team’s presence in Dhaka on January 14-15, 2023, their terror acts continued on the peaceful gatherings of the opposition in Mymensingh, Chittagong and other cities, sending many to hospitals and jails with multiple charges against each.

Reportedly, 24,000 members of the BNP have been taken to custody since early December of 2022. As of now, tens of thousands of them are in jails, booked under about 3.5 million fictitious charges. 

With the scrapping of the election-time Caretaker Government (CTG) by Sheikh Hasina immediately upon becoming the Prime Minister, the election system in Bangladesh totally collapsed. It became a symbol of heightened corruption and irregularities. No national or local level election had an iota of fairness or honesty.

Everything was controlled and managed by the ruling coterie to make its chosen candidates the winners. As such, as you may note, Sir, the representatives in the parliament, as well as the elected positions in the local bodies, almost entirely belong to the ruling class. In other words, the opposition has no say in any of these forums or anywhere. Any future elections to be free and fair, the existence of these fraudulently elected partisan elements will be a serious blockade.

The Election Commission and the election officials are carefully selected by the government to serve its purpose. With absolute control on the administration down to the lowest levels, including the election apparatus, the opposition is either unable or not allowed to make any electioneering activities or have its presence at the polls.

In many cases, suspected opposition voters were driven away by the Awami League thugs and their votes were proxied in favor of the ruling candidates. In addition, rounding up and sending the opposition leaders and activists to jails prior to elections had been routine tasks of the loyal RAB and police.

The results of the past 14 years are before anyone to examine and judge. Consequently, the country has fallen into a one-party authoritarian dictatorship since 2009. Under the chosen Election Commission, election officials and its fraudulently elected local bodies, the general public has no chance to exercise its free franchise during the polls.

As such, a fair and credible election under the present administration is a simple impossibility. The US may also ponder why the Hasina regime is vehemently opposed to elections under a CTG (citing constitutionality of her own vicious creation).

According to most observers, the ruling government is so unpopular and detested by the people that it has no chance of winning even a comfortable number of seats, let alone winning in a fair election. In view of the above situation, and with a view to ensuring credible elections in Bangladesh, the following steps are extremely essential:

Elections must be held under a neutral Caretaker Government, members of which should not be allowed to seek any elected positions. Prior to that, the government should step down and the parliament be dissolved. They (immediate past government) should have no role in the CTG.

The Election Commission and other election related officials should be reconstituted with neutral and non-partisan elements.

All controversial and partisan officials in the administration, including law enforcement agencies and the military should be removed. Even known partisan officials in the judiciary should also be either removed or suspended. This is needed to ensure the neutrality of the election-time administration.

All authoritarian tools, such as the RAB and DSA should be suspended during the elections.

Honorable Sir, it may be appreciated that if the people of Bangladesh can freely choose their representatives to run the government, most of the other problematic issues like democracy, human rights, freedom, corruption etc. will be resolved automatically. Under a corruption-free and accountable government, the country will be expected to move forward to greater progress and security, both locally and globally. It is the unelected or fraudulently elected or illegal regime that causes problems for the people and the world.

Finally, unless the future elections in Bangladesh are credible, fair and participatory, all the sincere efforts of the US will end in futility. The CHRD Bangladesh certainly does not desire such an outcome from your visit, Honorable Sir.